By Admin 
If we look at the map of India, oil wells are present from Digboi in Assam to Samandar (Mumbai High) in Mumbai and the coasts of Gujarat. Despite this, a big question often arises in the mind of the common man that when we have oil in our land and sea, then why do we extend our hands to Arab countries or Russia? Why does India import 85% of its crude oil needs from abroad and are our wells drying up? Come, let us understand this complex mathematics in very simple language.
The huge gap between domestic production and growing consumption
The history of crude oil production in India is quite old, but the problem is that our production is very small in front of our increasing appetite. At present India is the third largest oil consumer country in the world. Millions of barrels of oil are required every day to run our refineries and turn the wheels of the country’s vehicles. The oil produced from India’s own land and sea meets only 15 to 20 percent of the total consumption. This is the reason why we have to depend on the global market for the remaining 80 to 85 percent.
Discovery of new reserves and challenge of limited resources
It is not that efforts are not being made to find oil in India, but exploration of crude oil is an expensive and uncertain process. In India, companies like ONGC and Oil India are continuously digging new wells, but the pace of discovery of new reserves is much slower than the pace of increase in our consumption. Old oil fields like Mumbai High are now crossing their maturity age, due to which the cost of extracting oil from there is increasing and the production is gradually decreasing. In comparison, it is much easier and cheaper to extract oil in countries like Iraq or Saudi Arabia.
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Oil quality and technical requirements of refinery
The crude oil coming out of the soil of every country is not the same. Some oils are ‘sweet’ (low sulfur) and some are ‘solar’ (high sulfur). India’s modern refineries, which now produce BS-VI standard petrol and diesel, require a special kind of mixture. Many times the quality of domestic oil is not what is required to make high grade fuel. Therefore, to fully utilize their capacity and prepare fuel of international standard, refineries import different grades of oil from abroad.
Economic equations and mathematics of strategic oil purchases
Importing foreign oil is not just a compulsion, sometimes it is also a big economic benefit. Recently, during the Russia-Ukraine war, India has bought oil from Russia at a huge discount. When we get crude oil in the foreign market at a price lower than its production cost or at a competitive price, it proves to be better for the country’s economy and foreign exchange reserves. Apart from this, India also has to remain a part of the global oil trade to maintain better relations with the Gulf countries and ensure its energy security.
Future preparedness and importance of strategic reserves
India knows that being completely dependent on imports is risky, so the government is creating ‘Strategic Petroleum Reserve’ i.e. emergency oil reserves. Under this, oil has been stored in huge tanks under the ground in places like Visakhapatnam and Mangaluru, which is useful in case of war or supply stoppage. Also, the government is emphasizing on ethanol blending and electric vehicles so that the import bill of crude oil can be reduced. Until India fully prepares alternative routes for its energy needs, foreign oil will remain our compulsion.
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